Comparative balance sheets of Pam and Sun Corporations at December 31, 2016, follow:

Pam acquired 80 percent of Sun's capital stock for $3,320,000 on January 1, 2014, when Sun's capital stock was $4,000,000 and Sun's retained earnings was $150,000.
On January 2, 2016, Pam acquired $400,000 par of Sun's 10 percent bonds in the market for $391,000, on which date the unamortized premium for bonds payable on Sun's books was $90,000. The bonds pay interest on January 1 and July 1 and mature on January 1, 2021. (Assume straight-line amortization.)
1. The gain or loss on the constructive retirement of $400,000 of Sun bonds on January 2, 2016, is reported in the consolidated income statement in the amount of:
a. $27,000
b. $23,000
c. $21,000
d. $14,000
2. The portion of the constructive gain or loss on Sun bonds that remains unrecognized on the separate books of Pam and Sun at December 31, 2016, is:
a. $24,000
b. $21,600
c. $21,000
d. $18,400
3. Consolidated bonds payable at December 31, 2016, should be reported at:
a. $2,072,000
b. $2,000,000
c. $1,657,600
d. $1,600,000

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Pam Sun Assets Accounts receivable-net Interest receivable Inventories Other current assets Plant assets-net Investment in Sun stock Investment in Sun bonds $ 2,048,600 20,000 6,000,000 197,000 7,680,000 3,661,600 392,800 $20,000,000 $ 600,000 1,000,000 400,000 5,000,000 Total assets $7,000,000 Liabilities and Stockholders'Equity Accounts payable Interest payable 10% bonds payable Capital stock Retained earnings $ 800,000 $ 278,000 100,000 2,072,000 4,000,000 550,000 $7,000,000 16,000,000 3.200,000 $20,000,000 Total equities